NetSuite Financial User Study Guide Questions and Answer

NetSuite Financial User Study Guide Questions and Answer Total number of subsidiaries in OneWorld 124 subsidiaries in addition to the root for 125 total Elimination Subsidiary -Sales between subsidiaries, Inventory transfers between subsidiaries, Loans between subsidiaries -Doesn't count towards subsidiary count -Cannot be a parent subsidiary -Only for journal entries, not for other transactions What should you do before creating subsidiaries? -Plan organization structure -Build in Sandbox account then in Production account (subsidiaries can't be deleted, and when inactive, it will still show in reports and report filters) The following values cannot be changed after creating a subsidiary Sub-Subsidiary of, Elimination, Currency, Edition, Country Classifications used to track records such as financials, transactions, and employees Departments and classes Primary classification in OneWorld -Subsidiaries -When using other classifications (departments, classes, locations), you must associate them with a subsidiary Departments -Listed first on transactions -Useful when designating transactions and employees as part of an internal team (i.e. Dept for each team of employees to track income/expenses) Classes Useful for wider segments within your business (i.e. New or repeat customers; sales order would indicate whether transaction was for new or repeat customer) Locations -Enable you to track information about employees and transactions for multiple offices or warehouses (i.e. Corporate office, sales offices, warehouses) -Up to 50 locations -Caution: do not use locations to identify areas in your warehouse such as a bin, shelf, or dock What happens when you enable some accounting features? System automatically generates account specific to those features Chart of Accounts Provides a set of destinations for posting transactions, and categorizes transactions for tracking and reporting purposes Income Statement Accounts Cost of Goods Sold, Deferred Expense, Expense, Income, Other Expense and Other Income Balance Sheet Accounts Accounts Payable, Accounts Receivable, Bank, Credit Card, Deferred Revenue, Equity, Fixed Asset, Long Term Liability, Other Asset, Other Current Asset, Other Current Liability, Unbilled Receivable Cash Flow Statement Accounts Net of Income, Other Income, Accounts Payable, Accounts Receivable, Equity, Fixed Asset, Long Term Liability, Other Asset, Other Current Asset, Other Current Liability and Unbilled Receivable Statistical Accounts Part of the Advanced Financial module: track non monetary data then use that information for reports and income statements (i.e. Head count, square feet etc.) Account Numbering -Accounts are not automatically enabled -Setup Accounting Accounting preferences -This initializes a four digit account number Parent Accounts -You can build your chart of accounts with a hierarchical structure which means an account can have a parent associated with it -Parent accounts can be used as a posting account or non posting account Summary Account -Automatically inactivates the account, preventing you from posting activity to this account -Solely used for reporting purposes Child Accounts -Must set the "Subaccount Of" field to be the parent account and the Type must be the same type as the parent account (i.e. Cannot choose Account Payable (liability) as parent of an expense account) Bank Accounts -Can only be linked to one subsidiary -If the Multiple Currencies feature is enabled, select a currency to associate with the account Restrict an Account -Limit availability of some accounts to a single department, class, or location -If using OneWorld you can limit the use of an account to a subset of subsidiaries -Set restriction: 1) Set restriction on account records 2) Set restriction for user roles Account Registers -List of transactions for a particular account, for a selected date range, with the ending balance -NetSuite provides registers for posting and non posting accounts -Each register includes detailed information about all transactions affecting the account for a selected time period, including balance information Accounts Receivable Business Process Flow 1) Sales Order 2) Items/Services fulfilled, sales order invoiced and sent to customer requesting payment 3) Accept/Deposit customer's payment Invoice -Record of a sale to a customer -Process of creating bills for goods/services customers receive Create an Invoice -Transactions Sales Create Invoices -Record an invoice when payment is not received at the time of delivery -Invoice amount is the total due to be paid to you by the customer -Indicate terms of payment that specify when you expect to receive the money owed to you Sales Order -Transaction that records a commitment to sell items or services to a customer -Have no account impact until the items are shipped or services are completed -Fulfilling an order is shipping the items to fill an open order -Invoicing a sales order creates a record of debt owed to you by the customer for the sale Sales Order Process Flow 1) Enter Sales Order 2) Fulfill items 3) Invoice Invoice a Sales Order Usually, customers are invoiced for a sale when the items on the order are shipped. Once you ship the items, you invoice the customer. When you invoice a sales order, your accounts receivable ledger increases by the amount of the invoice. To convert a sales order to an invoice, navigate to Customers Sales Invoice Sales Orders All orders checked are processed together as one job. When invoices are in the processing queue, they no longer display on the Invoice Sales Order page. The processed orders list opens when the job is processed and lists the transactions created when each sales order is invoiced. Electronic Invoicing SuiteApp -Enables you to create electronic invoices (e-invoices) to help you comply with legal requirements in your country or to automate your order to cash process -E-invoices are generated from NS invoice records using custom templates that you create -Can send e-invoices to your customers individually or in batches, using various methods T/F: Invoices are always tied to a sales order False T/F: Terms entered on the customer record will appear by default on the Invoice created for the customer True T/F: Special price levels can be created and attached to the customer record True T/F: The Default Receivables Account must be set up on the customer record False Processing Payments and Credits -Applying a payment decreases the amount due and tracks income You can record payments in the following ways: 1)Applying a payment on the Customer Payment Page to apply payments (by check, credit card, or cash), credit memos, and deposits to multiple invoices and cash sales 2)Applying a payment on an Invoice to record a customer payment directly from the invoice Customer Deposits -Advance payment for an order/project -Commonly used for services, pre-orders or customer orders -Recorded in your general ledger as a liability until the goods or services are actually delivered and do not affect the customer's accounts receivable balance -Once the order is filled, the deposit is applied against the invoice and the liability is canceled out Record Customer Deposits There are two ways to record a customer deposit: 1) Creating a Deposit on the Customer Deposit Page 2) Creating a Deposit from the sales order -Deposits created this way are linked to the originating sales order and cannot be applied to other invoices. However, if the deposit total exceeds the order amount, the excess deposit amount is not linked to the original order and can be applied to any invoice. When you invoice the originating sales order, the reserved deposit is automatically applied Record Customer Credits and Refunds -Once you receive an item on a return, you may credit the customer in the amount they paid for the item. The credit for the return can be either a credit memo or a cash refund, depending on the type of return authorization created Credit Memo -Transaction that decreases the amount a customer owes you. The amount of a credit memo can be applied toward an invoice to decrease the amount the customer owes you -Customers Credits and Returns Issue Credit Memos Customer Refund -Transaction that records a payment you make to a customer. This payment is generally in the form of a currency or a printed check -Customers Accounts Receivable Issue Customer Refund Customer Record: Financial Subtab Info related to that customer's account with your company including credit card data, price Billing Schedule -Defines the schedule to bill a sale over a range of time or a contract term -Manages the billing process by tracking when to invoice customers and how much to bill -Can be applied to an entire sales order or a different billing schedule can be selected for each line item on an order -Can be added to an item record so it automatically shows on a sales order when that item is selected -Enable the Advanced Billing feature (allows service companies to manage recurring billing on sales orders) How many (and what) types of billing schedules are in NS? 1) Standard 2) Fixed Bid Interval 3) Fixed Bid Milestone 4) Time and Materials 5) Charge Based Standard Billing Schedule -Used on Sales Orders only -Breaks the sales order into separate bills according to the schedule -Bills generated can be either invoices or cash sales -If applied at the header level, it divides the entire order into separate bills -Initial amount is always the upfront amount and is always as of the sales order date Fixed Bid Interval Billing Schedule -Project use only -Invoice at predefined intervals -Bills in arrears only (bills at the end of each period) -Number of billing cycles calculated based on the duration of the project and the billing recurrence frequency -Percent work complete as of the bill date for each project item determines the amount billed Fixed Bid Milestone Billing Schedule -Specific project use only -Can only be created from the project record -Invoice in increments when project milestones are reached Time and Materials Billing Schedule -Project use only -Bill customers for actual time worked on a project and material costs -Billing dates are driven by the frequency selected in the billing schedule **Can use the same schedule for multiple projects. don't have to create separate ones. To create a private schedule for an individual project, create from project record Charge Based Billing Schedule -Project use only -Create charges that you can bill to your customers -Charge rules determine the billing rate, the timing of the charges, and the stage of a charge when it is generated -Can be either fixed fee, time based, or expense based T/F: NS doesn't allow you to create billing schedules that bill more than 100% of the invoice amount. False Recurrence Count Number of bills created after the initial billing Initial Payment Terms Payment requirements applied to the first billing instance Initial Amount Amount of the first billing instance Recurrence Frequency Frequency for billings to repeat such as daily, weekly, quarterly, monthly Accounts Payable Business Process Flow 1) Purchase Order 2) Items/Services received from vendor and logged into NS 3) Item receipt matched against open purchase order 4) NS notifies AP dept that payment should be made Sharing Vendors with Multiple Subsidiaries -NS OneWorld accounts: you can assign a primary subsidiary and an unlimited number of secondary subsidiaries to a vendor record -When you view a shared vendor record, you can see the vendor's total outstanding balance and total unbilled balance (sum of all of the assigned subsidiaries' balances) in the primary subsidiary's currency -You can designate a credit limit for the primary subsidiary and each of the secondary subsidiaries on the vendor record -You can also associate vendors and multiple subsidiaries with items, assigning a specific item price for each subsidiary purchasing from the vendor **You can define multiple secondary subsidiaries only through the user interface, not through SuiteScript or CSV import Purchase Orders -Authorize vendors to provide items, materials or services to your company -Used to track items that you expect to receive, items you do receive and items yet to be received -Expresses a commitment to receive and pay for goods and services. It has no accounting impact until you receive the order Purchase Requisition -Can also be used to purchase items, materials or services -Transaction that records a purchase that needs to be made. Details the item needed and the anticipated price of the item. Once the purchase requisition needs to become an actual purchase, the requisition must be converted into a purchase order Purchase Requisition Process (Optional) 1) Create Purchase Requisition 2) Approve Purchase Requisition 3) Create PO Purchase Order Process 1) Create PO 2) PO received 3) Bill PO Receiving Against Purchase Orders -Indicates you have received the items you ordered and added them to your inventory **This task is typically done by someone outside of the accounts payable department, but is shown here as the next step in the accounts payable process Bill Purchase Orders -Indicates you have received an invoice from the vendor for items purchased and creates a bill in accounts payable **Unapproved vendor bills will not post to the general ledger unless it is approved. NS recommends the use of Payment Hold flag if you want the transaction to post to the general ledger but don't want to allow the bill to be paid Create a Bill without PO -When a purchase order does not exist and no inventory is received, create a bill manually to pay for goods or services received (i.e. Internet service provider) T/F: When creating a vendor, the most important area to focus on is the vendor address False T/F: You must create two separate POs for expenses and items False Process Vendor Payments Process 1) Bill PO 2) Approve Bill 3) Pay Bill Vendor Credit -Transaction to show credit from a vendor that you can apply to your payables account -Vendors may credit your account if you return merchandise to them or negotiate a discount after receiving an invoice 3 Ways to Create Vendor Credit 1) Manually - may not necessarily be associated with an existing bill. Useful to record credit or a discount negotiated from your vendor either after receiving a bill or independent of any bills 2) Directly from an Original Vendor Bill - useful to record credit for some or all items on an existing bill and automatically associate the credit with the original bill 3) Directly from a Vendor Return - the items and amounts autofill the credit from and the credit is associated with the return Apply Vendor Credits -Apply to decrease the amount owed to a vendor -When applied against an open bill, the amount of the credit is deducted from the total amount of the bill. You can apply a vendor credit to a bill on the credit transaction or on a payment transaction Write Checks -Used to pay an expense, record a non-check transaction, record cash transactions, enter other non-check debits such as debit card transactions **Writing checks is only the disbursement process, it doesn't reduce your AP balance. To reduce your AP balance, the activity must originate from a transaction -Reimburse employees for expenses if you don't use Direct Deposit/AP, pay vendors if you don't use AP, record cash transactions, enter other non-check debits such as debit/credit card transactions Void Checks -Used to account for a price adjustment, stop payment, check or payment created in error -Once the check is voided it sets the amount to zero, but does not remove it from the system. However, you must still create the voiding journal entry in the general ledger Other Payment Methods -These features connect your accounts payable processes with third-party payment systems, processors and financial institutions to make payments. Payment processing activities include handling invoice payments from accounts payable and bank account transfers Online Bill Pay -Money comes from your company to your vendor and processed by printed check -Enables you to make payments without printing and sending checks to pay bills -Feature authorizes payments to be sent to vendors, customers, employees, or other recipients enabled for online bill pay -Transactions that can be selected for online bill payment include bill payments, reimbursements to employees for expenses and sales tax payments **Not supported for OneWorld accounts ACH Vendor Payments -Money comes from your company to your vendor and processed by ACH process -Process to authorize the transfer of funds from your bank accounts into your vendors' bank accounts to pay bills -Vendor payments must be approved by admin before they can be processed for payment -Automated Clearing House (ACH) processing is used to process financial transactions through the ACH Network for the ACH Vendor Payments feature **Canadian accounts use Automated Clearing Settlement System (ACSS) instead of ACH Direct Deposit for Payroll -Money comes from your company to your employee and processed by ACH process -Disburse payroll funds directly to employees' bank account Electronic Payments -Money comes from your company to your vendor/employee and processed by your company's bank -Process bank payments of your vendor bills, employee expenses, partner and employee commissions, and customer refunds -Receive bank payments from customers -Can generate payment files that contain instructions for facilitating electronic fund transfers between bank accounts Make Deposits -Record funds you deposit into your bank account -Received for existing transactions -Add funds not related to transactions payments (i.e. Overpayment refund from your insurance carrier due to a recalculation of the premium) -Record any cash received back from the bank (i.e. You received a cash payment from a customer, but used a portion of it to pay for something because your petty cash account was underfunded; record the payment here) Undeposited Funds -Typically organizations post customer payments received in the form of cash, checks and credit card payments to the Undeposited Funds ledger account rather than to a specific bank account -Prevents a time lag between the amount shown on your books for a bank account and the bank balance -When you record a deposit, NS moves funds out of the Undeposited Funds account to the ledger account for the bank account, to accurately reflect bank account balances -If you record customer payments directly to a bank account rather than to Undeposited funds, you do not need to create deposits for those amounts Transfer Funds -Movement of funds from one bank account to another bank account -In NS, bank accounts include accounts for petty cash. If you set up credit card accounts as bank accounts, you can transfer funds to pay your credit cards 2 Types of Bank Transfers 1) Two bank accounts with shared currency -Exchange rate is always one -G/L impact of this transfer is denominated by the subsidiary's base currency -Base currency translation using the transfer amount, based on the default system rate (i.e. Transfer 100 EURO from Australian account into another Australian account that uses EURO. Australian subsidiary's base currency is AUD so translate 100 EURO to AUD) 2) Base currency bank account to foreign currency bank account -Exchange rate is the rate between the subsidiary's base currency and that of the selected foreign currency -When you select the From and To bank accounts, NS displays the default system exchange rate between the two currencies. When you enter a value in the From Amount field, NS translates the value and displays it in the To Amount field. If you change the translated value in the To Amount field, NS automatically updates the exchange rate to ensure it reflects the values in the two Amount fields (i.e. Transfer 100 USD from a US account to a UK account that uses GBP currency. NS displays the default system exchange rate, which is 1.6. When you enter $100 in the From Amount field, NS translates the value and displays 62.50 in the To Amount field. If you enter 130 in the To Amount field, NS updates the exchange rate field to 0. (100/130). In this case, the G/L impact will be in base currency, which is USD 100) **OneWorld account: one of two bank accounts must be in base currency Transfer between bank accounts and non-bank accounts -Typically done with checks or deposits -Make journal entries to transfer funds to non-bank accounts Company Credit Card Charges -At any time you can add a company credit card to your list of accounts. After you set up the account, you can enter company credit card charges, pay the credit card bill, and reconcile the credit card statement -To manage charges and payments for your company credit card, you should first enter each individual transaction -Charge - to record a purchase -Credit - to record a credit to your account Reconcile Bank Statements -Reconcile bank statement against bank account register to keep NS account accurate -Checks written in a previous month that are not cleared display on the Reconcile Bank Statement page on the Deposits and Credits subtab. Until these checks are cleared they will not display on a Bank Reconciliation Report -Transfers to and from bank accounts display on your bank statements as other transactions and are reconciled in the same method. Enter new transactions on the New Charges or New Deposits subtab (i.e. Bank services fees or interest income) -When you reconcile a bank account, all reconciled transactions are automatically marked cleared -Account register shows if a cleared transaction is reconciled and identifies the reconciliation date -Transactions that require reconciliation have a Reconcile link in the Reconcile column of the account register Manually clear transactions -You can manually mark transactions as cleared in the check register if the items have cleared the bank but don't display on a statement -Not associated with a statement date and will not display on a Bank Reconciliation Report Reconcile Credit Card Statements -Reconcile credit card statement against credit card register to keep NS accounts accurate -Verify transactions: payments and credits (such as for returned merchandise), charge and cash advances, fees and chargebacks -Statement balance should equal sum of last reconciled balance and transactions reconciled this statement. Use a balance adjustment journal entry to manage any differences Bank Register Report -Lists all transactions for a particular bank account (i.e. Checking account, savings account, petty cash account) -View-only report; shows existing transactions Reconciliation Summary Report -Shows cleared and outstanding transactions for the account -Provides a summary of your reconciliation (i.e. Previous bank balance amounts, totals of cleared and outstanding transactions during time period, ending bank balance amount) **Can view report only after you reconciled bank account. Print reconciliation report before you reconcile again because you will not be able to go back and recapture the same info Reconciliation Detail Report -List of reconciled and unreconciled items for a bank account for a statement date -Lists all transactions for time period of statement, amounts of each transaction for cleared and uncleared items **Can view report only after you reconciled bank account. Print reconciliation report before you reconcile again because you will not be able to go back and recapture the same info